News

On June 29, The Colorado Supreme Court released its decision in St. Jude Co. v. Roaring Fork Club that could have significant impacts on water rights and real-property development throughout Colorado. The Court’s decision effectively prohibits direct-flow water rights for aesthetic, recreation, or piscatorial (fishery) purposes. For years, private property owners have obtained such rights from the water courts to enhance the use and enjoyment of their property, and its value.

The underlying facts of the case are as follows. A private club in Basalt applied for an absolute water right for 21 c.f.s. from the Roaring Fork River that it diverted into an existing ditch. The ditch is a flow-through structure that returns the water to river approximately one-half mile downstream from the point of diversion. The water rights application indicated that the water is used as an “aesthetic and recreational amenity to a golf course development, as well as for fish habitat and as a private fly-fishing stream.” The club sought a decree for “aesthetic, recreation, and piscatorial uses.” The water court decreed 21 c.f.s. for aesthetic, recreation, and piscatorial use.

The Supreme Court concluded that the club had not demonstrated an intent to put the water to beneficial use. Without a beneficial use, there can be no water right, and thus, the Court reversed the water court’s grant of the water rights.

The Court analyzed in detail the definition of “beneficial use.” Statute provides that “beneficial use” means “the use of that amount of water that is reasonable and appropriate under reasonably efficient practices to accomplish without waste the purpose for which the appropriation is lawfully made.” The Court distinguished between a “purpose,” “use,” and “beneficial use” as follows:

• a “purpose” is the end for which the water is used;
• a “use” is the application of water toward a given purpose and the means to an end; and
• a “beneficial use” is that use that is reasonable and appropriate under reasonably efficient practices to accomplish without waste the purpose for which the appropriation is made.

The Court wrote that the Club usage of water is not a “use” nor “beneficial use” under the statute. The Court found the club’s “uses” of water to be entirely “passive” and that the water is only “used” in the sense that someone derives enjoyment from the water in its diverted state. The Court cited the dictionary’s definition of “use” as “to put into action or service,” and used the coalbed methane process of using water to release methane gas as an example of a “use” of water permitted under the statute.

The Court’s discussion of “use” is important. It suggests that the Court is drawing a distinction between “active” and “passive” use of water, and that water is put to “use” under the statute only if the water is actively being used to produce something. Until this case, Colorado law has not expressly required water use to be active in order to obtain a water right.

The Court also wrote that in order for there to be a “beneficial use” of water under the law, there must be objective limits on the water use beyond which use becomes unreasonable, inappropriate, inefficient, or wasteful. The Court took issue with the club’s proposed water use because there were no such objective limits. Instead, the water would be used to serve the subjective enjoyment of the club’s private guests. The court wrote that “[t]he flow of water necessary to efficiently produce beauty, excitement, or fun cannot even conceptually be quantified.”

The Court concluded its discussion by stating that the club is in effect seeking a riparian water right, which is not permitted under Colorado law. A riparian water right is the right to the flow of water in its natural channel upon and over an owner’s land. In 1882, the Colorado Supreme Court emphatically concluded that riparian law is wholly inapplicable in Colorado. While the club’s proposed use is not a riparian use per se because the club diverted water from its natural channel, the Court nonetheless concluded that the club is effectively trying to recreate a natural stream on their property. For this reason, the Court found the proposed right to be virtually the same as a riparian right and not permitted under Colorado law.

The decision in St. Jude could have significant impacts on water rights and real property development throughout the state. Many property owners enjoy having water flow through a ditch on their property for aesthetic, recreation, and piscatorial uses, and such water rights often add value to the property. The decision appears to almost completely foreclose on such rights.

Also, the decision calls into question the validity of conditional water rights that were decreed for such a purpose but have not yet been used, and thus not made absolute. In order to obtain a court decree making a conditional right absolute, the applicant must demonstrate that the water was put to beneficial use. If flow-through aesthetic, recreational, and piscatorial use is not a beneficial use, then such conditional rights cannot be made absolute.

Additionally, while the case only deals directly with surface water rights, the reasoning and analysis seem equally applicable to storage rights. Many property owners enjoy having a small pond on the property for aesthetic, recreational, and piscatorial use. Statute states that storage of water for recreational, fishery, and wildlife purposes are beneficial uses. However, it does not state that storage for aesthetic use is a beneficial use. Also, the storage statute appears inconsistent with the courts new active vs. passive rule. St. Jude’s effect on storage rights is unclear, but it may limit the types of storage rights that can be decreed and make it more difficult to obtain them.

The outfall of St. Jude won’t be known for years, and further litigation is necessary to further define the reach of the Court’s rule. However, absent the legislature passing a law defining direct-flow water rights for aesthetic, recreation, or piscatorial purpose as a “beneficial use,” such water use may be a thing of the past.

IMPORTANT: Visiting this website, sending an email through this website, or submitting a message through this
website does not create an attorney-client relationship with Beattie, Chadwick & Houpt, LLP or its attorneys
and does not prevent Beattie, Chadwick & Houpt, LLP or its attorneys from representing an adverse party.
Until representation is established through a client engagement letter, we cannot guarantee that information
submitted to Beattie, Chadwick & Houpt, LLP or its attorneys through this website will be maintained as
confidential or privileged. Finally, nothing on this website constitutes legal advice. Thank you.